Singapore Economic Growth - Essay Example

Singapore Economic Growth By   Singapore Economic Growth A strong economic growth is the quantitative capability of an economy to produce goods and services that increases in value and output without decreasing in each of the subsequent years while on the other hand a sustainable economic growth is the ability of the given economic status to support the individuals of a given nation ensuring that the number of people who are living below poverty line are minimal as possible. In addition to that, a sustainable economic growth does not solely focus in ensuring that people live a good life it also focuses on other aspects of life, that is environment and the social lives of people. The economic growth of Singapore is not that strong and sustaining. This is because, Singapore’s population is growing at a slow rate that the current economic plan cannot sustain. The available productive population is not enough to produce goods and services that can support the large old and unproductive population. More to that is Singapore had is limited in terms of land availability and has limited supply of water. This makes it hard to sustain its economy as a lot revenue earned is spend in purchasing this resources rather than developing the economy of that nation (Abeysinghe & Choy, 7). However, it has to be concluded that, though Singapore’s economic growth has not attained a level in which it can be referred to us strong and sustaining, its economy has grown tremendously since 2013. The Economic Development Board of Singapore is committed to achieve better and better investment strategies every year while striving to generate jobs for citizens of Singapore. In order for Singapore to grow economically, it should focus on ensuring that it records a high level of GDP and GNI. This is because these are the indicators of performance of a nation. Therefore, in order for Singapore to increase its GDP per capita. This is well attained by ensuring that Singaporeans are advised to consume the locally produced commodities. Consumption of foreign commodities should be limited since purchase involving such commodities lead to loss of local income. Moreover, Singaporeans should be encouraged to make investments. Investments are a way of ensuring that the local currency circulates appropriately within the economy and therefore reduces the imbalance between the poor and the rich (Koh, 2). In addition to that, government of Singapore is advised to increases its expenditure in generating job opportunities and establishment of social amenities like hospitals, schools, road networks, that will ensure that the living standards of people is greatly improve. Also, government should subsidize some commodities and the process of production of the same. This will make the final goods and services affordable to those who have low income brackets. Finally, the governments should also come up with strategies to save for people who will be retiring and therefore spend in building schemes where revenue can be save for future generation. Singapore is well known as a major exporter of electronics and chemicals. It should therefore maximize on this so as to raise revenue for purchasing raw materials and natural resources that it does not have. One of the competitive advantage Singapore has is that it is an open market and attractive to investors and this should be utilized well if for it to have a strong and sustainable economy in the year 2015. Good governance is key for development in any nation. In the case of Singapore, the government should become more inclusive in and focus on the immediate needs of its citizen. This government is expected to come up with viable plans and achievable targets that must effectively meet any economic challenge facing the people. In addition to that, the governance should ensure that it is honest to it citizen, that is, all revenues collected must be used appropriately. Provision of basic need, for instance, is fundamental for better economic growth and this should be a key concentration to Singapore as a nation. A healthy people has energy to work and make their life better as compared to a nation that is starved (Peebles & Watson, 10). Also, Singapore should educate its citizens, this is because, with education comes innovation and creativity that enables efficient production of goods and services hence economic growth. In addition to that, well educated people can effectively sustain their economy than a nation that is dominated by low-learned people. With all this met, happiness comes automatically. Geographically, Singapore a minute land and therefore land is valuable. Government has ensured that land is maximized by building many tall skyscrapers that are adjacent to another. In addition to that Singapore has managed to ‘create’ land by reclaiming part of its coastal regions that were under tide and were wasteland. Finally, the government advocate for construction of income generating facilities, alongside any industrial estate construction, like supermarket runs, restaurants among others. Access to qualified labor force determines where companies are located and the performance of the same. If this fails to work, these companies and industries fail or move to other places or even to other countries and this will be a major blow to the economy of Singapore. Owing to this, Singapore should ensure that jobs are available for people to work within the country and limit these labor force from looking for work in the neighboring countries. Also, industries should pay well the labor force they have thus encouraging them work within. In adverse cases, Singapore also utilizes expertise from outside. They do so with the aim of ensuring continuity of industries within Singapore. Women are also encouraged to join the workforce. Finally, some companies train their employees and provide tax benefits to them as a way of motivating them. Capital, especially raw material, in Singapore is scarce and sometimes it is purchased for instance materials for making electronics and chemicals. Therefore, capital is highly treasured and maximized to make the most profit out of them. Finally, entrepreneurship has grown exponentially. This is attributed to the fact that most of the foreign investor who are attracted by the open nature of Singapore’s economy. As Singapore plan for their projected economy in the next 50 years to come, they are faced by some of the mentioned challenges as follows. Singapore suffers from low birth rate. As a result, in approximately from 2030, a larger number of the working population will retire and as a result the younger generation will replace them. However, this generation of young people is too small to work and create a strong and sustainable economy. Owing to the future projection that there might be a crisis in the scarce young population to work in the economy, Singapore has embarked on absorbing immigrants into their economy. This has consequently led to congestion since Singapore itself has little space to accommodate a large population. In addition to that, the immigrants are paid less and are given less prestigious jobs. In the long run the GNP of Singapore will deteriorate and also will widen the gap between highly paid Singaporeans and the less paid foreigners hence leading to unsustainable economy (Shen, 21). Higher rates of interest leads to inflation. This means that the working population will need to save a lot of money for their future. As a result, less is available for spending on investment opportunities thus leading to slow economic growth. Moreover, with increment in government on infrastructure and other facilities, taxes will rise hence straining the working population wages to the extent that they will have less to spend on economically productive activities thus leading to slow economic growth (George, 8). Externally, Singapore faces competition from other established nations like China, Asia and Germany. Singapore is finds it difficult to cope up with such nations since it has limited resources to produce its exports as compared to these neighboring nations. Due to this, it owns a little share for its GDP in the global market as compared to these neighboring nations. Singapore export larger quantities of its oil in Malaysia. Recently Malaysia is suffering from low prices in crude oil. As a result of this, Singapore’s economy will be greatly affected since the revenue they earn from Malaysia will reduce significantly. In order to protect Singaporeans to consume imports and promote local commodities, Singapore has imposed huge tax on imports. However, this strict protectionism makes other nations not exports their commodities to Singapore owing to demand. As a result, Singapore has scared potential trading partners who would otherwise have led to growth of Singapore economy as a result of the international trading. The government of Singapore has now decided to increase the productivity and level of competence of their workers. This is because when these two variables are adjusted accordingly, the challenge of increasing the number of workers, especially foreign ones, be minimized. The underway plan is to ensure that worker’s productivity is directly proportional to years that is every worker is expected to increase his or her productivity by 1 per cent annually for a span of ten years. Singapore also should aim at creating a suitable and conducive working environment with it surrounding nations. For instance, the trading agreement it signed with India has boosted their relationship as trading partners. Recently, Singapore has extended its trading linkage to other parts of the world with an objective of becoming a pillar and a node in the global-Asia market. Industrially, the Singapore government has is supporting industries to enable them restructure their operations. The government has come up with schemes meant to provide tax benefits and education workers of business to invest in productivity. According to reliable source, the government has invested more than $ 2.9 billion is such programs more so programs that focus on continuous learning of workers. The Singaporeans also are working to maintain national cohesion as a nation by ensuring that they respect and value the culture of others. Despite of various geographical and ethnical backgrounds that exists among them. Their sole motive is to ensure that fundamental principles like just, fair treatment of people in work area, meritocracy and aspiration for one another is highly upheld. The Economic Development Team of Singapore has one main strategy, besides, follow up bulletins and news to identify business opportunities around the world. With this in mind the country is targeting international markets. This is made possible by the extensive research and development strategies the board is laying. A closer analysis of the services that are now offered in Singapore, are internationally oriented. Some of this services range from, luxurious and expensive restaurants. The Sentosa Island attracts millions of tourist throughout the year. In to that addition, Singapore has embarked on maintaining clean roads. Finally, there is high usage of English as a common language, especially by expatriates and businessmen. This clearly indicates that it is setting up international standards for future markets (Blomqvist, 14). Singapore is also projecting to redevelop its urban centers. This is because, by re-planning the urban center, congestion of traffic towards the CBD will be greatly reduce and hence simulate economic growth. Finally, Singapore government aims at establishing telecommunication systems and generating power plants that will spearhead manufacturing and service sectors. Moreover, it is planning to diversify its banking services as well as ensuring that there is trust, transparency and accountability in handling their financial matters. Currently, Singapore economy is faring on well and with correct investments projection, it will be strong and sustainable. However, the aging population has to be dealt with by promoting high birth rates. This, in the long run, will minimize the number of foreign workers in Singapore leading to a stable economy. The economic model of Singapore is in such a way that it pays keen concentration to services but on the external markets it highly advocate for exports. The success of the economy is majorly on the plans that the government came up with. The approach they are using accepts that there is are possibility of becoming success and as a result, the Economic Development Board base their decisions on possibilities rather than on the market itself. References Abeysinghe, T., & Choy, K. (2007). The Singapore economy and econometric perspective. New York: Routledge Koh, A. (2002). Singapore economy in the 21st century: Issues and strategies. Singapore McGraw-Hill. Peebles, G., & Watson, P. (2006). The Singapore economy. Cheltenham: Edward Edgar. Shen, P (2001). The Singapore economy, new directions. Eastern University Press. George, W. (2008). Challenges for Singapore after the global financial crisis. Singapore. World Scientific. Blomqvist H. C. (2000). Swimming with sharks: Global and regional dimensions of Singapore economy. Marshall Cavendish Academic. Read More